Edition 37

After surprising on the downside into mid year, recent Chinese economic indicators suggest growth is bottoming and is likely to come in around 7.5% this year.

However, a sharp growth rebound is unlikely as policy has not been eased enough and export growth will be constrained by recession in Europe and slow growth in the US. Expect growth in 2013 to also be around 7.5%

Radical changes in policy direction are unlikely under the new leadership. Change will likely remain gradual.

Chinese shares are cheap and have probably bottomed.